The Main Changes in the 2026-27 CII R02 and R03 Study Texts
Here, we take a look at the main changes that you’ll come across in the 2026/27 version of the CII’s R02 and R03 study texts. As there have been no significant syllabus changes, the majority of the amends stem from the Autumn Statement 2025, the Spring Budget 2026, the new tax year and regulatory updates. This article is particularly relevant to the CII R02, R03, R06, AF1, AF4, and AF5 exams.
This article is correct as at 26 August 2026 and is relevant to the 2026/27 examinable tax year.
R02 good news – very few changes!
Chapter 2 – Equities, property and alternative investments
A new cryptoasset regime is expected to come into force in October 2027.
Chapter 8 – Other indirect investments including life assurance-based products
The whole chapter on life assurance investments has been condensed and re-ordered with some content deleted, such as how bonds affect the married couple’s allowance, child benefit and universal credit.
VCT income tax relief updated to 20% along with some changes to the qualifying conditions.
R03 – Key changes
Chapter 1 – Income Tax
Changes to Married Couple’s Allowance – raised to £11,700, reduced if net income over £39,200 but floor of £4,530.
Dividend tax rates – basic rate and higher rate increased by 2% to 10.75% and to 35.75% respectively – no change for additional rate taxpayers.
VCT income tax relief amended to 20%.
Chapter 2 – National Insurance Contributions
Lower earnings limit increased to £129pw.
Class 2 – small profits threshold increased to £7,105pa.
Class 2 – weekly voluntary flat rate increased to £3.65.
Chapter 3 – Capital Gains Tax (CGT)
Business asset disposal relief – first £1m qualifying gains made during lifetime now taxed at 18% (was 14%).
Investors’ relief has its own separate limit of £1m – now also taxed at 18% (was 14%).
Chapter 4 – Inheritance Tax
Business relief – 100% relief on interests in unincorporated businesses/subject to a £2.5m allowance for qualifying business or agricultural property (the 100% relief allowance).
50% relief for assets in excess of the allowance.
50% relief for AIM-listed shares (reduced from 100%).
Chapter 6 – Tax compliance and self-assessment
Making Tax Digital (MTD) for Income Tax – introduced a requirement for landlords and self-employed to keep digital records of their self-employed and property income and related expenses. Requires quarterly reporting to HMRC using MTD software.
MTD applied from April 2026 for those whose self-employed and property income combined (Note: based on income rather than profit) for the tax year 2024/25 was more than £50,000.
Applies from 6 April 2027, for those with combined income over £30,000 for the tax year 2025/26.
A new regime of late submission and late payment penalties applies to those who are required to use MTD.
Interest rate on underpaid tax is base rate plus 4%.
Chapter 7 – Stamp duties
Be aware – the government is planning to replace stamp duty and SDRT with a single tax on transfers of shares and securities. The single tax should be implemented in 2027.
Chapter 10 – Indirect investments
From 2027/28 under 65s will only be able to put £12,000 of £20,000 overall limit into cash ISAs.
Enterprise Investment Scheme (EIS) – changes to qualifying company rules:
- Company must have gross assets not exceeding £30m prior to investment (£35m after)
- And must have raised no more than £10m under EIS (£20m for knowledge investment company)
Venture Capital Trusts (VCTs) – Income Tax relief reduced from 30% to 20% and same changes to qualifying companies as per EIS.
